Sept. 2 (Bloomberg) -- U.S. stocks fell, after the Standard
& Poor’s 500 Index had its best month since February, as energy
producers sank with the price of crude to offset data showing
U.S. manufacturing expanded at the fastest pace in three years.

The S&P 500 lost 0.1 percent to 2,002.28 at 4 p.m. in New
York, trimming earlier losses of 0.4 percent in afternoon
trading. The Dow Jones Industrial Average slipped 30.89 points,
or 0.2 percent, to 17,067.56. The Nasdaq Composite Index rose
0.4 percent, extending its highest level since March 2000. More
than 5.7 billion shares changed hands on U.S. exchanges today,
snapping an nine-day streak of volume below 5 billion shares.

“The 2,000 area is still in play, and we’ve yet to move
past it convincingly as it remains a speed bump in the short-term,” Joe Bell, senior equity analyst at Cincinnati-based
Schaeffer’s Investment Research Inc., said by phone. “The
manufacturing index was better than expected, but after that
strong rally we had through much of August, the market is taking
a bit of a breather.”

The Institute for Supply Management’s manufacturing index
unexpectedly climbed to 59, the highest level since March 2011,
from July’s 57.1, the Tempe, Arizona-based group reported today.
Readings greater than 50 indicate growth. The median forecast in
a Bloomberg survey of economists was 57.

Global Data

The news on manufacturing was less positive overseas as
U.K. factory growth slowed more than forecast last month and
Italian manufacturing shrank as Europe suffered the fallout from
weakening demand and mounting geopolitical risks. Output growth
in China also slowed.

The S&P 500 jumped 3.8 percent in August, climbing above
2,000 for the first time, amid improving economic data and
speculation the Federal Reserve will keep interest rates low
even as the economy shows signs of strengthening. The gauge has
advanced 8.1 percent in 2014.

The economy expanded more than previously forecast in the
second quarter, propelled by the biggest gain in business
investment in more than two years, the Commerce Department
reported last month. A Labor Department report on Sept. 5 will
show payrolls rose by more than 200,000 in August for a seventh-straight month, a Bloomberg survey of economists showed.

Accelerating Economy

“Overall, data supports the idea that the economy is
accelerating going into the second half of the year, which
certainly helps the equity markets,” Kevin Caron, who helps
oversee $170 billion at Stifel Nicolaus & Co. in Florham Park,
New Jersey, said in a phone interview. “You’ve had investors
who have been increasingly encouraged by the direction of the
data in the economy. They’ve been discouraged from holding
assets in low-yielding, safer assets.”

The S&P 500’s rally isn’t over and the gauge could jump 50
percent more by 2020 as the U.S. economic recovery heads for a
record winning streak, according to Morgan Stanley.

A slower though sustained period of growth could help the
equity benchmark gauge peak near 3,000, according to a report
today. The world’s largest economy, which began recovering in
July 2009, may continue growing for five years or more, making
it the longest period of expansion, Morgan Stanley said.

Ukraine Conflict

In Ukraine, the government warned of an escalating conflict
in its easternmost regions, even as U.S. President Barack Obama
headed to eastern Europe to reassure NATO members. Ukraine and
its allies in the U.S. and Europe accuse Russia of dispatching
troops and backing separatist militias to open a new front in
the conflict. Russia has repeatedly denied involvement in the
unrest.

“U.S. investors will try to focus on the economic agenda
of the day, while geopolitical issues remain in the
background,” Stephane Ekolo, chief European strategist at
Market Securities in London, wrote in an e-mail.

The Chicago Board Options Exchange Volatility Index, the
gauge of S&P options prices known as the VIX, rose 2.3 percent
to 12.25. The gauge lost 29 percent in August, the biggest
monthly drop in almost three years.

Energy Slump

Five of the 10 main S&P 500 groups retreated, with energy
stocks falling 1.3 percent to pace declines. Newfield
Exploration and Noble Corp. slid at least 2.1 percent as the
price of West Texas Intermediate crude slumped. Chevron Corp.
lost 1.5 percent.

Home Depot sank 2 percent to $91.15, halting a five-day
rally. The largest home-improvement chain said it was working
with banks and law enforcement to investigate the possible
breach.

Regeneron gained 2.6 percent to $359.50, an all-time high.
The cholesterol drug that the company is developing with Sanofi
cut levels of heart disease-causing fat in four studies,
according to results released over the weekend.

Dollar Stores

Staples climbed 8.1 percent to $12.63, the highest since
May. The world’s largest office-supply chain was raised to
outperform from neutral at Credit Suisse.

Tesla rose 5.4 percent to $284.12, an all-time high. A
Stifel Nicolaus & Co. report cited the electric-car maker’s
increasing production and said it may be worth $400 a share even
before it starts making a lower-priced model.

Dollar General Corp. added 0.6 percent to $64.36. The
retailer said today that it raised its offer for smaller rival
Family Dollar Stores Inc. to $80 a share in cash, compared with
an initial $78.50 bid. Family Dollar Stores rose 0.5 percent to
$80.22.

Norwegian Cruise Line Holdings Ltd. surged 11 percent to
$36.99 after agreeing to acquire Prestige Cruises International
Inc. for about $3.03 billion. Prestige is owned by private
equity firm Apollo Global Management LLC, which also holds a 20
percent stake in Norwegian.

Compuware Corp. shares climbed 13 percent to $10.59. The
company will be acquired by private equity firm Thoma Bravo LLC
in a deal valued at $2.5 billion.

Exelixis Inc. slumped 55 percent to $1.85. A trial for its
cabozantinib treatment for prostate cancer failed to meet its
aim of showing an increase in survival rates compared with
another drug. The company said it will reduce its workforce by
about 70 percent to focus its financial resources on other
clinical trials for cabozantinib.